Thailand Legal Alert: Virtual Banking in Thai Financial Services

On March 4, 2024, the Minister of Ministry of Finance (“MOF”) issued a new regulation through the Notification of Ministry of Finance re: Criteria, Methods and Conditions for Application For and Issuance of Virtual Bank License (“Virtual Banking Notification”), which came into effect on March 20, 2024. This Virtual Banking Notification presents immense opportunities for technology, digital services, and data experts to establish innovative virtual banks.

This Virtual Bank Notification offers a platform for qualified experts in technology, digital services, and diverse data fields to develop advanced innovations and deliver new financial services efficiently through digital channels, catering the needs of customers. Operating virtual banks would facilitate the delivery of innovative financial services or enhancements to existing financial services through novel digital avenues. The objectives include promoting financial inclusion for and improving financial accessibility, particularly for specific target groups, such as retail and SME customers, who may currently be underserved or unserved by the traditional banking system. Additionally, this initiative aims to stimulate competition within the Thai financing system.

License Application Period
The application window for the virtual bank license (“VBL”) will be open from March 20, 2024, to September 19, 2024, spanning a 6-month period. Alongside the application form, prospective applicants must furnish various documents to the Bank of Thailand (“BOT”) for evaluation. These documents include the virtual banking business model and plan, intended organizational structure, customer protection management plan and policies, risk management plan and risk culture enhancement plan.

Key Applicant Qualifications
Applicants for the VBL must submit their applications to the BOT and demonstrate the following qualifications:

  1. having experience and resources to support virtual banking operations in alignment with the proposed business model and plan.
  2. possessing profound expertise and experience in operating technology-driven business and providing services through digital channels.
  3. having demonstratable experience in acquiring, accessing, managing, and utilizing data, including capacity to develop systems or data connections facilitating user activities, allowing them to use their data to conduct transactions with other providers


Application Evaluation Process
1. Application Submission:
Following the application review process, the BOT will compile and recommend the list of qualified VBL applicants to the Minister of the MOF.

2. Announcement of Selected Applicants:
The Minister of the MOF will thoroughly scrutinize and announce the list of qualified VBL applicants (“Selected Applicants”) within 9 months from September 19, 2024, with the provision of potential 1-year extension in exceptional circumstances

3. Requirements for Selected Applicants:
Selected Applicants must satisfy all stipulated conditions to secure the Minister of the MOF’s approval of the VBL, including establishment of head office in Thailand and formation of a public company with a minimum paid-up registered capital of THB 5 billion, along with plans outlining increase in paid-up registered capital to at least THB 10 billion after the initial operational phase.

4. Issuance of VBL:
Upon fulfilment of all conditions, Selected Applicants are required to submit a request for the issuance of the VBL to the BOT, and, subsequently to which the BOT will proceed with the issuance to the successful applicants.

5. Commencement of Operations:
Selected Applicants must commence virtual banking services within 1 year from the date of approval by the Minister of the MOF, with the possibility of a maximum 2-year extension with reasonable circumstances

Criteria Assessment
In assessing the applicants’ qualifications for the VBL, the BOT will consider the following criteria:
  1. applicant’s possession of the key qualifications;
  2. contribution to Thailand’s economy, including provision of appropriate financial service, facilitated, enhanced financial safety through digital channel, and innovative and efficient financial solutions, while mitigating risks to the stability of Thailand’s financial system or to service recipients; and
  3. applicant’s potential and ability to operate a virtual banking business according to business model and plan, encompassing service through digital channels, financial risk management, financial support from significant shareholders and the presence of qualified directors.


For further detail and expertise on the matter, please contact; Kraisorn Rueangkul, Partner, Thailand, [email protected] and Siwaphorn Phornthepkasemsant, Senior Adviser, Thailand, [email protected]